The Silver Lining On The Grooveshark Ruling: At Least It Didn't Screw Up The DMCA Safe Harbors

from the it's-something dept

Earlier this week, we wrote about the easy summary judgment issued against Grooveshark, in which the actions of the company's founders completely doomed the company in the ruling. As we noted, there were some interesting legal arguments for an operation like Grooveshark, but they were all completely undermined by the founders' actions. Jon Healey, over at the LA Times has a good take on all of this noting that the silver lining in all of this is that, at the very least, nothing in this ruling screws up the DMCA safe harbors. There were legitimate concerns -- as with many such cases -- that a court would get somewhat blinded by the "but piracy!" claims and twist things around to rule in a way that would screw up the DMCA safe harbors. However, by having founders whose activity was damning in its own right, the court didn't even have to get into a discussion of the DMCA at all. It wasn't even an issue.

...from the standpoint of other tech companies, at least the pain is going to be confined to Grooveshark and its founders, not to other companies that operate online platforms. Griesa's ruling is just the latest reminder that such companies can't hope to be protected by the DMCA if their own staff infringes.

This was a very serious concern. As law professor Eric Goldman has pointed out repeatedly, there's real copyright law and file sharing copyright law, and the two aren't always related. Basically, because what many companies are doing feels wrong to some judges, they'll often twist and contort the law to call what's happening illegal, even if a straightforward reading of the statute would suggest otherwise. See the Supreme Court's ruling in the Aereo case as just one example.

And there was a real risk here that the same sort of thing would happen. If Grooveshark's founders and employees weren't uploading a ton of music themselves, there was a fairly legitimate argument that the same sort of DMCA safe harbors that protect YouTube would also protect Grooveshark. But there was certainly a difference in feel. Many people just instinctively felt that Grooveshark's activities must be bad, without understanding the full legal arguments behind them. So, in some ways, while it's going to hurt Grooveshark's founders financially (big time) in this case, the fact that they were so over the top in their activities might actually be a good thing for the law.

And, it might have some carry over benefits as well. If Grooveshark had prevailed, and the DMCA safe harbors held that the company was not directly liable for infringement done by its users, it would become Exhibit A from the legacy recording industry for why the DMCA safe harbors would need to be gutted by the upcoming attempt at copyright reform. So, in some ways, it appears that the ruling this week might actually be innovators and the DMCA safe harbors dodging a bullet.

Reader Comments

Excellent summary...

Thanks for the well balanced reasoning, Mike! It IS nice to see that other laws and cases on the books show that this didn't need to get as far as the safe harbor issue. Just like with patents, "on the internet" shouldn't be a reason for creating new legal precedent, and it looks like the court agrees (in this case).

Re: Excellent summary...

Thanks for the well balanced reasoning, Mike! It IS nice to see that other laws and cases on the books show that this didn't need to get as far as the safe harbor issue. Just like with patents, "on the internet" shouldn't be a reason for creating new legal precedent, and it looks like the court agrees (in this case).

But the court wasn't asked to look at the DMCA in the first place, was it?

Re: Re: Excellent summary...

But the court wasn't asked to look at the DMCA in the first place, was it?

Looks upward from there. A little farther... there it is! "It IS nice to see that other laws and cases on the books show that this didn't need to get as far as the safe harbor issue." See - he already said exactly what you're pointing out.

If Grooveshark's founders and employees were uploading a ton of music themselves, there was a fairly legitimate argument that the same sort of DMCA safe harbors that protect YouTube would also protect Grooveshark.

Maybe I'm just not reading this correctly, but I don't follow you, Mike. If the people at Grooveshark were themselves uploading the files, then how could they possibly get safe harbor? 512(c) only applies "for infringement of copyright by reason of the storage at the direction of a user." The content wouldn't be stored "at the direction of a user" if they uploaded it themselves. Am I missing something?

Re:

It could be argued that the employees of Grooveshark were not acting as Grooveshark employees when uploading files, but were acting as Grooveshark USERS and thus the company should have safe harbors from their actions and they would need to be sued for infringement individually.

However, since the management at the company actually instructed their employees to upload content, this argument probably could not have gone very far.

Re: Re:

It could be argued that the employees of Grooveshark were not acting as Grooveshark employees when uploading files, but were acting as Grooveshark USERS and thus the company should have safe harbors from their actions and they would need to be sued for infringement individually.

Re:

Re: Re:

Yes, you're not reading the article that is linked from the hyperlink for the phrase "protect Grooveshark."

Sorry, I should have been more clear. That linked-to article is about user-uploaded content. This decision is about content uploaded by the people at Grooveshark. From the opinion: "The claims asserted in this action only relate to the direct upload of plaintiffs’ copyrighted music by Escape’s officers and employees." Whether Grooveshark had licenses to perform those works is irrelevant. Hence my question of how the DMCA could possibly apply like it would with YouTube.

Re:

Maybe I'm just not reading this correctly, but I don't follow you, Mike. If the people at Grooveshark were themselves uploading the files, then how could they possibly get safe harbor? 512(c) only applies "for infringement of copyright by reason of the storage at the direction of a user." The content wouldn't be stored "at the direction of a user" if they uploaded it themselves. Am I missing something?

No, that was a bad typo on my part. I was saying if the employees WERE NOT uploading, there would be a DMCA argument. My bad.

What safe harbors?

Why are we still talking about the DMCA takedown system as if it's something good that protects the Internet, when it's been obvious for years that that's anything but the case?

This article even calls out one of the best examples of this phenomenon... as support for the DMCA takedown system: YouTube. The DMCA did nothing to keep Viacom from trying to sue YouTube out of existence, and if a company with Google's resources hadn't bought them out, there's no way YouTube would have survived.

Similarly, it did nothing to protect Aereo, MegaUpload, or any number of other cases that Techdirt has covered over the years, but Techdirt always seems to have this particular blind spot that the DMCA takedown system provides a "safe harbor" that benefits and protects legitimate websites.

As Mark Twain famously put it, "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so." And in this case, the existence of "safe harbors" just ain't so. Maybe in theory they're supposed to be there, but where are the examples of it actually protecting companies that the bad guys want gone?

All the DMCA takedown system does is gets (frequently illegitimate) censorship for copyright owners, without them having to go to the trouble of actually establishing in a court of law that the alleged infringer did something wrong. The entire system is an abomination and needs to be thrown out in its entirety.

Re: What safe harbors?

The safe harbor loophole is the only thing keeping many internet companies afloat, as they can (apparently) claim no knowledge of what their site is really used for: selling ads against content they didn't create or pay for.

Re: Re: What safe harbors?

1. The law does not require a site to do the impossible and determine, on their own, what is and is not an infringing file, so matter how much some groups want it to.

2. If copyright owners find something of theirs on a site, they can file a DMCA claim on it, until then, the site has no obligation to do anything.

3. Infringement knowledge must be specific, sites do not lose safe harbor protections for not magically knowing which files are infringing and pre-emptively taking them down, again, despite some claims to the contrary.

4. And finally, the law has stated that it doesn't matter if a device or service is used for infringement, as long as it has 'significant non-infringing uses' it's in the clear.

Re: What safe harbors?

Maybe in theory they're supposed to be there, but where are the examples of it actually protecting companies that the bad guys want gone?

You make a great point. I'm sure there are such cases, but the targets need a great deal of money to defend themselves, so the value of the safe harbor is dubious. On the other hand, you always need a lot of money to defend yourself from anything, so I don't know how the law could be improved without totally overhauling the legal system. There could also be cases where someone isn't sued in the first place because of the safe harbors, but that would be difficult or impossible to measure.